The European Union’s top antitrust regulator is facing calls to resign after a “historic” court ruling involving a small Italian lender upended Brussels’ approach to bank rescues and prompted calls for compensation, Reuters reported. In a blow to EU competition commissioner Margrethe Vestager, EU judges ruled on Tuesday that Italy’s plan for the rescue of Tercas bank five years ago was legal, overturning the Commission’s earlier decision that had forced the recouping of financial aid to the lender.

Stores are closing daily on the U.K.’s shopping streets in a crisis reminiscent of the U.S. retail apocalypse, and there’s no sign of a bottom, Bloomberg News reported. The latest casualties include Kate Middleton’s fashion favorite L.K. Bennett, cake baker Patisserie Valerie and entertainment retailer HMV, which has collapsed into insolvency twice. Department-store chain Debenhams Plc is shutting dozens of outlets as it fights billionaire Mike Ashley’s bid for management control. Rival House of Fraser is shrinking after being rescued by the tycoon last year.

Germany’s top economic experts have slashed their growth forecast for 2019 from 1.5 per cent to 0.8 per cent, offering fresh confirmation that Europe’s largest economy is losing momentum, the Financial Times reported. “The period of high growth in the German economy is over for now. But given the strong domestic economy there is no reason to expect a recession,” said Christoph Schmidt, a professor of economy and one of the five members of Germany’s government-appointed council of economic experts.

In a related story, the International New York Times reported on a Reuters story that Italy is studying changes to the country's securitisation rules in order to help banks shed so-called 'unlikely-to-pay' (UTP) loans, a document seen by Reuters showed on Tuesday. Italian banks have drastically reduced defaulted loans on their balance sheets but for the most part they are yet to tackle UTP loans, which are not yet in default but are unlikely to be repaid in full.

Italy will renew for up to 36 months a state guarantee scheme to help banks shed bad loans, tightening rules to increase protection for some investors, a draft law decree seen by Reuters showed. The ‘GACS’ scheme allowing banks to buy a guarantee from the state on the least risky tranche in bad loan securitization sales, has proved a success in helping lenders tackle the legacy of a deep recession, Reuters reported.

Deutsche Bank and Commerzbank, Germany’s two biggest banks, are in talks to merge. The news broke over the weekend, hot on the heels of a Deutsche Bank research report called “How to fix European banking... and why it matters.” So we have a rare case of a merger suitor publishing a big intellectual defense of its actions before anyone knew about the talks. The problem is that the intellectual defense can still be breached, a Bloomberg View reported.

A rising share of unfilled job positions in Germany, despite weakening industrial production, pushed the eurozone’s vacancy rate to a record, the Financial Times reported. In contrast, vacancies remained low in most peripheral economies. The region’s job vacancy rate accelerated to 2.3 per cent in the final quarter of last year, compared with 2.1 per cent in the previous three months and the highest ratio since records began in 2009, Eurostat data released on Monday revealed.

Deutsche Bank and Commerzbank have formally opened talks on a controversial merger that would reshape Germany’s financial sector and create the eurozone’s second-largest lender by assets, the Financial Times reported. The senior management of Germany’s two largest listed lenders said on Sunday they had begun exploratory talks, after the executive boards of both banks agreed to evaluate the benefits of a tie-up.

However bad a spiralling money laundering scandal has been to the three Baltic countries, it could get even worse. Financial regulators in Estonia and Latvia told the Financial Times they were afraid Swedish banks — which dominate both headlines on money laundering and their banking systems — could withdraw from the region, just as Danske Bank and Nordea have already done amid dirty money allegations, the Financial Times reported. “Sure, we are very worried,” said Peters Putnins, head of the Latvian regulator.

How worried should we be about debt? The answer is not straightforward. First, the bear case. In short, debt is just too big for comfort. Global debt has swelled 50 per cent in the decade since the credit crisis, according to Standard & Poor’s, the rating agency, the Financial Times reported in a commentary. Government debt in the eurozone is higher than before the financial crisis, as are, in some cases, household debt-to-income ratios.